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Amendment Of VAT Decree-Law: UAE

24/01/2024
Amendment Of VAT Decree-Law

UAE Ministry of Finance has embraced several amendments to Federal Decree-Law No.8 of 2017 on Value Added Tax(VAT). The new amendments are included in Federal Decree-Law No. 18 of 2022. These are proposed due to the loopholes and challenges faced by several businesses.

The following amendments would be effective from January 1st, 2023

  • Registered people who make taxable supplies are eligible to request an exemption from VAT registration if all of their supplies are zero-rated or if they stop making any other supplies besides zero-rated supplies

 

  • One of the circumstances used to determine the date of supply is the day one year has passed since the date the goods or services were given.

 

  • The location of the supply of transport-related services shall be the place where the transportation starts.

 

  • Imports of transportation equipment, products connected to transportation equipment, and rescue aircraft and ships will not be subjected to Zero VAT.

 

  • The domestic reverse charge will apply to Pure Hydrocarbons

 

  • Charitable organizations are eligible to recoup input VAT they paid to provide the necessary charitable operations.

 

  • Record-keeping requirement for VAT recoverability.

 

  • If the taxable individual uses a false tax treatment. The taxable person should now issue a tax credit note to modify the output tax in such circumstances.

 

  • When a taxable person sends a tax invoice with the label "VAT" on it or gets money marked up as "VAT," it is required that they pay the VAT to the Federal Tax Authority (FTA).

 

  • In line with the deadline established for releasing tax invoices, a 14-day window has been set aside for the issuance of tax credit notes to settle output tax.

 

  • If it is judged necessary, the Federal Tax Authority (FTA) may forcefully deregister registered individuals under certain circumstances.

 

  • If the FTA has sent a notice to audit the taxable person, the 5-year statute of limitations will not apply as long as the audit is finished within 4 years of the notice's date of issuance. The statute of limitations is extended by one year if a voluntary disclosure is made by a taxable person within five years of the conclusion of the applicable tax period.
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